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The question that I hear most often from clients interested in filing a Chapter 7 bankruptcy is, who can file for bankruptcy?

Any “person that resides or has a domicile, a place of business, or property in the United States, or a municipality” could file for Chapter 7 bankruptcy.

In 2005, congress enacted the The Bankruptcy Abuse Prevention And Consumer Protection Act (BAPCPA) to prevent bankruptcy laws from being abused. The enactment of BAPCPA made it more difficult for people to file a bankruptcy case.  Specifically, it imposed an stringent means test that a person must pass in order to qualify for relief under Chapter 7 of the Bankruptcy Code.

The means test consists of determining a person’s current monthly income, then comparing the current monthly income in an annualized basis to the median income of a like-sized family in Maryland or Washington D.C.  If the person’s income is less than or equal to state’s median family income, then the debtor passes the means test and is eligible to file under Chapter 7.  If the person’s income is above the median family income, then further analysis must be done of the person’s debts and expenses by a qualified bankruptcy attorney.

Please see this video by the U.S. Bankruptcy Court  for information about the bankruptcy process:

 

 

I hope this information provides you with some insight about  who can file for bankruptcy. Your bankruptcy case will have a better outcome the better informed you are.

Consult with an experienced bankruptcy attorney before filing a bankruptcy case and learn about the bankruptcy process.

Are you’re ready learn more about the bankruptcy process in Maryland or Washington D.C.? Call 202-445-4775 for a free consultation.